Monday, February 12, 1996

 

ISSN: 0511-4187; Volume v32; Issue n6

 

Message to the Congress on Iraq. (President Bill Clinton)(Transcript)

Total number of pages for this article: 3 FULL TEXT

 

 

� February 9, 1996

 

 

� To the Congress of the United States:

 

 

� I hereby report to the Congress on the developments since my last

report of August 1, 1995, concerning the national emergency with respect

to Iraq that was declared in Executive Order No. 12722 of August 2,

1990. This report is submitted pursuant to section 401(c) of the

National Emergencies Act, 50 U.S.C. 1641(c), and section 204(c) of the

International Emergency Economic Powers Act, 50 U.S.C. 1703(c).

 

 

� Executive Order No. 12722 ordered the immediate blocking of all

property and interests in property of the Government of Iraq (including

the Central Bank of Iraq) then or thereafter located in the United

States or within the possession or control of a U.S. person. That order

also prohibited the importation into the United States of goods and

services of Iraqi origin, as well as the exportation of goods, services,

and technology from the United States to Iraq. The order prohibited

travel-related transactions to or from Iraq and the performance of any

contract in support of any industrial, commercial, or governmental

project in Iraq. U.S. persons were also prohibited from granting or

extending credit or loans to the Government of Iraq.

 

 

� The foregoing prohibitions (as well as the blocking of Government of

Iraq property) were continued and augmented on August 9, 1990, by

Executive Order No. 12724, which was issued in order to align the

sanctions imposed by the United States with United Nations Security

Council Resolution 661 of August 6, 1990.

 

 

� Executive Order No. 12817 was issued on October 21, 1992, to implement

in the United States measures adopted in United Nations Security Council

Resolution 778 of October 2, 1992. Resolution 778 requires U.N. Member

States to transfer to a U.N. escrow account any funds (up to $200

million apiece) representing Iraqi oil sale proceeds paid by purchasers

after the imposition of U.N. sanctions on Iraq, to finance Iraq's

obligations for U.N. activities with respect to Iraq, such as expenses

to verify Iraqi weapons destruction, and to provide humanitarian

assistance in Iraq on a nonpartisan basis. A portion of the escrowed

funds also funds the activities of the U.N. Compensation Commission in

Geneva, which handles claims from victims of the Iraqi invasion and

occupation of Kuwait. Member States also may make voluntary

contributions to the account. The funds placed in the escrow account are

to be returned, with interest, to the Member States that transferred

them to the United Nations, as funds are received from future sales of

Iraqi oil authorized by the U.N. Security Council. No Member State is

required to fund more than half of the total transfers or contributions

to the escrow account.

 

 

� This report discusses only matters concerning the national emergency

with respect to Iraq that was declared in Executive Order No. 12722 and

matters relating to Executive Orders No. 12724 and 12817 (the "Executive

orders"). The report covers events from August 2, 1995, through February

1, 1996.

 

 

� 1. During the reporting period, there were no amendments to the Iraqi

Sanctions Regulations.

 

 

� 2. The Department of the Treasury's Office of Foreign Assets Control

(FAC) continues its involvement in lawsuits seeking to prevent the

unauthorized transfer of blocked Iraqi assets. In Consarc Corporation v.

Iraqi Ministry of Industry and Minerals, No. 945390 (D.C. Cir. Dec. 15,

1995), the U.S. Court of Appeals for the D.C. Circuit issued its second

opinion in this case, finding in FAC's favor on all issues presented to

the court. The court ordered the district court judge to direct Consarc

Corporation to restore the status quo by returning $6.4 million plus

interest to the blocked Iraqi government account from which it was

withdrawn after the district court erroneously held that these funds

were not blocked Iraqi government property. The court also found that

the unsold furnace manufactured for the Iraqi government and sales

proceeds of a second furnace were blocked property. Finally, the court

reversed the district court's ruling that Consarc held a specific claim

against a blocked Iraqi government account for $6.4 million, holding

that any claim Consarc had against the Government of Iraq was as a

general creditor only.

 

 

� Investigations of possible violations of the Iraqi sanctions continue

to be pursued and appropriate enforcement actions taken. Several cases

from prior reporting periods are continuing and recent additional

allegations have been referred by FAC to the U.S. Customs Service for

investigation. Additional FAC civil penalty notices were prepared during

the reporting period for violations of the International Emergency

Economic Powers Act and Iraqi Sanctions Regulations with respect to

transactions involving Iraq. One de minimis penalty has been collected

from an organization for unlicensed exports in violation of the

prohibitions against transactions involving Iraq. Several other penalty

proceedings are pending completion.

 

 

� 3. Investigation also continues into the roles played by various

individuals and firms outside Iraq in the Iraqi government procurement

network. These investigations may lead to additions to FAC's listing of

individuals and organizations determined to be Specially Designated

Nationals (SDNs) of the Government of Iraq.

 

 

� 4. Pursuant to Executive Order No. 21817 implementing United Nations

Security Council Resolution 778, on October 26, 1992, FAC directed the

Federal Reserve Bank of New York to establish a blocked account for

receipt of certain post-August 6, 1990, Iraqi oil sales proceeds, and to

hold, invest, and transfer these funds as required by the order. On

September 5, 1995, following payments by the Governments of Australia

($216,360.00), Denmark ($168,985.00), Japan ($4,075,000.00), The

Netherlands ($4,168,745.47), New Zealand ($67,050.00), Switzerland

($265,108.20), and by the European Union ($647,463.31), respectively, to

the special United Nations-controlled account, entitled "United Nations

Security Council Resolution 778 Escrow Account," the Federal Reserve

Bank of New York was directed to transfer a corresponding amount of

$9,606,711.98 from the blocked account it holds to the United

Nations-controlled account. Similarly, on October 30, 1995, following

the payment of $1,504,000.00 by the European Community, and payments by

the Governments of Germany ($355,871.89), The Netherlands

($2,698,348.13), Norway ($199,983.00), and the United Kingdom

($2,188,992.67), the Federal Reserve Bank of New York was directed to

transfer a corresponding amount of $6,947,195.69 to the United

Nations-controlled account. Finally, on December 21, 1995, following the

payment of $3,062,197.28 by the European Union, and payments by the

Governments of the Netherlands ($1,922,719.00), Sweden ($4,223,178.20)

and the United Kingdom ($208,600.44), the Federal Reserve Bank of New

York was directed to transfer the amount of $8,313,066.13 to the United

Nations-controlled account. Cumulative transfers from the blocked

Federal Reserve Bank of New York account since issuance of Executive

Order No. 12817 now have amounted to $200 million, fully satisfying the

U.S. commitment to match the payments of other Member States from

blocked Iraqi oil payments, and its obligation pursuant to United

Nations Security Council Resolution 778.

 

 

� 5. The Office of Foreign Assets Control has issued a total of 618

specific licenses regarding transactions pertaining to Iraq or Iraqi

assets since August 1990. Licenses have been issued for transactions

such as the filing of legal actions against Iraqi governmental entities,

legal representation of Iraq, and the exportation to Iraq of donated

medicine, medical supplies, food intended for humanitarian relief

purposes, the execution of powers of attorney relating to the

administration of personal assets and decedents' estates in Iraq and the

protection of preexistent intellectual property rights in Iraq. Since my

last report, 28 specific licenses have been issued.

 

 

� 6. The expenses incurred by the Federal Government in the 6-month

period from August 2, 1995, through February 1, 1996, that are directly

attributable to the exercise of powers and authorities conferred by the

declaration of a national emergency with respect to Iraq are reported to

be about $1.6 million, most of which represents wage and salary costs

for Federal personnel. Personnel costs were largely centered in the

Department of the Treasury (particularly in the Office of Foreign Assets

Control, the U.S. Customs Service, the Office of the Under Secretary for

Enforcement, and the Office of the General Counsel), the Department of

State (particularly the Bureau of Economic and Business Affairs, the

Bureau of Near Eastern Affairs, the Bureau of International Organization

Affairs, the Bureau of Political-Military Affairs, the U.S. Mission to

the United Nations, and the Office of the Legal Adviser), and the

Department of Transportation (particularly the U.S. Coast Guard).

 

 

� 7. The United States imposed economic sanctions on Iraq in response to

Iraq's illegal invasion and occupation of Kuwait, a clear act of brutal

aggression. The United States, together with the international

community, is maintaining economic sanctions against Iraq because the

Iraqi regime has failed to comply fully with United Nations Security

Council resolutions. Security Council resolutions on Iraq call for the

elimination of Iraqi weapons of mass destruction, Iraqi recognition of

Kuwait, and the inviolability of the Iraq-Kuwait boundary, the release

of Kuwaiti and other third-country nationals, compensation for victims

of Iraqi aggression, long-term monitoring of weapons of mass destruction

capabilities, the return of Kuwaiti assets stolen during Iraq's illegal

occupation of Kuwait, renunciation of terrorism, an end to internal

Iraqi repression of its own civilian population, and the facilitation of

access of international relief organizations to all those in need in all

parts of Iraq. More than 5 years after the invasion, a pattern of

defiance persists: a refusal to account for missing Kuwaiti detainees;

failure to return Kuwaiti property worth millions of dollars, including

military equipment that was used by Iraq in its movement of troops to

the Kuwaiti border in October 1994; sponsorship of assassinations in

Lebanon and in northern Iraq; incomplete declarations to weapons

inspectors; and ongoing widespread human rights violations. As a result,

the U.N. sanctions remain in place; the United States will continue to

enforce those sanctions under domestic authority.

 

 

� The Baghdad government continues to violate basic human rights of its

own citizens through systematic repression of minorities and denial of

humanitarian assistance. The Government of Iraq has repeatedly said it

will not be bound by United Nations Security Council Resolution 688. For

more than 4 years, Baghdad has maintained a blockade of food, medicine,

and other humanitarian supplies against northern Iraq. The Iraqi

military routinely harasses residents of the north, and has attempted to

"Arabize" the Kurdish, Turcomen, and Assyrian areas in the north. Iraq

has not relented in its artillery attacks against civilian population

centers in the south, or in its burning and draining operations in the

southern marshes, which have forced thousands to flee to neighboring

States.

 

 

� In April 1995, the U.N. Security Council adopted Resolution 986

authorizing Iraq to export limited quantities of oil (up to $1 billion

per quarter) under U.N. supervision in order to finance the purchase of

food, medicine, and other humanitarian supplies. The resolution includes

arrangements to ensure equitable distribution of such assistance to all

the people of Iraq. The resolution also provides for the payment of

compensation to victims of Iraqi aggression and for the funding of other

U.N. activities with respect to Iraq. Resolution 986 was carefully

crafted to address the issues raised by Iraq to justify its refusal to

implement similar humanitarian resolutions adopted in 1991 (Resolutions

706 and 712), such as oil export routes and questions of national

sovereignty. Nevertheless, Iraq refused to implement this humanitarian

measure. This only reinforces our view that Saddam Hussein is

unconcerned about the hardships suffered by the Iraqi people.

 

 

� The policies and actions of the Saddam Hussein regime continue to pose

an unusual and extraordinary threat to the national security and foreign

policy of the United States, as well as to regional peace and security.

The U.N. resolutions affirm that the Security Council be assured of

Iraq's peaceful intentions in judging its compliance with sanctions.

Because of Iraq's failure to comply fully with these resolutions, the

United States will continue to apply economic sanctions to deter it from

threatening peace and stability in the region.

 

 

� William J. Clinton

 

 

� The White House, February 9, 1996.